From Broke to Financially Woke Interview Series – Budget Kitty
Today, I am excited to share with you the sixth interview in the From Broke to Financially Woke series! The purpose of this series it to give hope to those struggling to escape from the not so secret group Broke Phi Broke. A group whose chant is, “We ain’t got it. Broke, Broke, Phi Broke! We ain’t got it. Broke, Broke, Phi Broke!”
To help me accomplish this goal, I have invited the best and brightest of the financial independence community here to share their stories. As you read their interviews, pay close attention to the mistakes they made. Take mental note of the success principles they used to turn things around.
When trying to apply these principles to your own life, realize that success in life is rarely linear. You will encounter some struggles. But stay persistent. Keep moving forward.
Our special guest today is Mike from Budget Kitty. At his lowest point, Mike and his family had $75,000 in debt. He found it more difficult to improve his finances, given the fact that he was living in a high cost of living area.
But he eventually turned things around and is on the right track. Let’s see how he did it…
Introduce yourself. Where do you blog? What are some of your interests outside of financial independence?
Hello! My name is Mike and I write about personal finance at BudgetKitty.com. Budget Kitty’s mission is to help families take care control of their finances by giving them the tools and resources to succeed and teaching them the important money lessons they never learned in school.
I live in New Jersey with my beautiful wife and three awesome kids who are extremely active and keep us running around from one field to another.
My ideal day would be a delicious and hearty breakfast, followed by a day spent watching my kids play youth soccer, and then grilling burgers and drinking some hazy IPA in the backyards with family and friends.
Tell us about a time where you were a member of Broke Phi Broke. How did living paycheck to paycheck make you feel as a person? At your lowest point, how much debt did you have?
When we first got married my wife and I both had steady jobs and we lived very comfortably. Then we started having kids and decided that my wife would be a stay at home mom which effectively cut our income in half.
We thought we were prepared but then we stretched ourselves to buy a house that ended up being a money pit of constant repairs. We tried to live frugally but there always seemed to be some expenses dragging us down. The cost of living in NJ is very high too and we had trouble making ends meet and so we relied on credit cards to get by.
At our worst I think we were at about $75,000 in debt not including the mortgage.
Luckily, we were able to escape the money pit and find a better home with a lower mortgage. We looked at all of our expenses and trimmed everywhere we could. And we also looked for different ways to increase our income. I got promoted at work which brought a nice raise and we’ve got several side hustles going including blogging at Budget Kitty, online surveys, focus groups, and selling stuff on eBay.
What are some of your biggest financial mistakes?
I think our biggest mistake was poor communication. I always felt we were on the same page for the most part but then we got into a big discussion over dinner one night and realized our goals were not lined up as well as before.
That led to us talking about money more, choosing goals, and creating a plan to reach them.
Describe your upbringing. Where did you grow up? What did your parents or teachers teach you about money?
I grew up in New Jersey and I was the youngest of five children. My mom stayed home with us kids and my dad worked full time. We never had a lot and it was always a struggle, but my parents always managed to keep food on the table.
My dad never went to college and learned about personal finance like many of us do…through trial and error. He made plenty of mistakes, but there are a few things I learned from him.
He taught me the value of a good work ethic and that you should never stop learning and trying to improve yourself.
He gave me my entrepreneurial streak and a desire to build a side income to replace the day job.
And when he was unceremoniously laid off by his employer, I learned that we can’t rely on our day job alone. We need to build other streams of income to take care of our family.
How important is becoming financially woke to you? What steps have you take to increase your financial knowledge?
Becoming financially woke is extremely important to me and helping others do the same is why I started Budget Kitty. I don’t think schools do a very good job of teaching young people how to deal with money and make smart financial decisions.
I know I wasn’t very money savvy when I left school and I have worked hard to learn all those important lessons on my own. I hope to share that knowledge and help others who were in the same boat I was by explaining key personal finance lessons in plain English.
What are some of the key principles you have used to improve your financial life?
Mindful spending is so important. There was a time we were spending more money than we were bringing in and didn’t even realize it. It was just so easy to order Chinese food or buy a new pair of sneakers without even thinking about it.
And that’s okay to every so often but if it becomes the norm you’ll eventually find yourself in trouble.
Setting goals and tracking our progress has also been key in turning around our financial situation.
How often do you consume personal finance information? Name 3-5 of your favorites sources (books, podcasts, blogs, etc.).
Constantly. I follow more personal finance blogs than I can count and I’m subscribed to a ton of podcasts so I can learn during my daily commute. My favorite money podcasts are Listen Money Matters, Afford Anything, and Planet Money.
On the book front a few must reads are The Millionaire Next Door, Rich Dad Poor Dad, and I Will Teach You to be Rich.
Where are you on the path to financial freedom now?
We still have a long way to go. After years of being out of control I feel like we’ve righted the ship and we’re finally headed in the right direction. It will take some time to pay down our debt and set ourselves up for retirement but we will get there together.
Is there any advice/encouraging words you can give those who are struggling to escape Broke Phi Broke?
Don’t give up! Debt sucks, trust me I know. But you’re not the only one in your situation and you can still turn things around.
I’m not saying it will be easy. If it was easy you would have done it already. Just start small and try to form good money habits. Over time you might just be amazed at the results.
How can the readers contact you?
You can reach out to me on Twitter @BudgetKitty or check out my blog at BudgetKitty.com
Questions to Ponder
- How important is it for you and your significant other to be on the same page about money?
- What are some of your financial goals? Are you using a spreadsheet or online tool to track your progress?
- Does your husband or wife stay at home with your kids? If so, how do you get by on just one income?
- Do you think escaping Broke Phi Broke is more difficult if you are living in a high cost of living area like New Jersey?
- Would you like to share your story of how you escaped Broke Phi Broke? Email me at firstname.lastname@example.org.
Read more interviews in the From Broke to Financially Woke Series.
Please share this From Broke to Financially Woke interview on social media! Include the hashtag #becomefinanciallywoke.
Jerry is a Business Insider Contributing Writer who is obsessed with personal finance. He believes you can improve your financial situation by applying principles taught by the financial independence community to your financial life.
If you are having trouble saving, he recommends that you join the SaverLife Savings program where you can get a $60 reward after six months (no income requirement). All you have to do is put a minimum of $20 a month into a savings account. Easy, right?
For a fun read, check out his article 10 Signs You’re a Personal Finance Addict to see if you are a personal finance nerd.
Before you go, check out the new From Broke to Financially Woke Interview Series.
Also, please subscribe below if you found his content valuable and want to continue following him as he documents his own journey from Broke to Financially Woke!